Long Dollar & U.S. Stocks Most Crowded Trade, Says BofA

When investing concepts of mean reversion and too many people in a trade collide, watch out. It might be time for that trade to be ending.

A new Bank of America Merrill Lynch report warns that the “U.S. decoupling trade,” long stocks and the dollar, is now “crowded.”

Lower energy prices supportive for US equities and the US Dollar

Citing CFTC speculative positions being at a 52-week extreme, irrational exuberance and the magnitude of positioning in the trade is now “reaching a dangerous level,” B. of A. strategists were quoted as saying:

 “The collapse in oil prices over the past two months has provided a further boost to the US decoupling trade as...